The toll rates of the Delhi-Noida bridge will be linked to the consumer price index (CPI). This is opposed to the surface transport ministrys mandate to all other privatisation programmes that the toll escalation factor should be linked to the wholesale price index (WPI).
This proposal will allow for the annual hike in the toll rate for users of the Noida-Delhi bridge on the basis of an increase in the CPI. The escalation factor has been agreed to in view of the high foreign exchange component in the funding pattern of the bridge.
The estimated cost of the project is Rs 433 crore. The entire debt component of the bridge and part of the equity component is being funded by the Asian Development Bank and the World Bank. The project is expected to operate on a debt equity ratio of 70:30.The debt component of the project does not carry any sovereign guarantees.
Instead, the exchange rate depreciation factor is to be loaded on to tolls. The annual toll escalation is to be done through a 100 per cent neutralisation of the CPI to offset any losses that may accrue on account of exchange rate fluctuations. This is unlike the second Narmada bridge concession pact, where the annual increase is to be provided in the form of a 100 per cent neutralisation of the WPI. The concession pact for this bridge was also signed in November 1997 with the engineering major L&T.
The concession pact for the Noida bridge was signed in November 1997 with Infrastruc- ture Leasing and Financial Services Ltd (ILFS), the Uttar Pradesh state government and the surface transport ministry.
According to sources, the Delhi-Noida bridge will have an open ended concession pact. So far, all bridges, by-passes and highway stretches offered for private investment have close ended concession pacts for only 30 years.
ILFS, which is the BOOT operator for the project, has been offered a rate of return of 18 per cent, the sources said. The effective equity rate of return on the project is expected to be approximately 23 per cent.
ILFS is the only concessionaire to have secured such terms from the surface transport ministry. The bridge does not carry any form of traffic guarantees. Instead , to ensure traffic flow and mitigate operational risks for the project, the Delhi government has agreed to shelve the two temporary bridges along the route.
The project, which has reached financial closure, is expected to be completed in two years.
